EXECUTIVE DIRECTOR UPDATE 2015 BILLS AFFECTING ATRS February 13, 2015

ATRS Board's Legislative Package

The ATRS Board of Trustees has unanimously voted to support a seven (7) bill package for this legislative session. In addition, the ATRS appropriation bill* has been filed on behalf of ATRS by the Joint Budget Committee.

Non-Spousal Rollover: Makes ATRS law comply with IRS code that allows a beneficiary that is not the spouse of a member to be eligible for certain rollovers. Now SB38 Senator Blake Johnson

Disability Retirement: To allow members to retire on disability as they currently do, but require additional requirements for continued eligibility after retirement. Now SB48 Senator Bill Sample

Technical Corrections: Minor clarifications of existing laws. Now SB50 Senator Eddie Cheatham.

Private School Service: Allow ATRS to make the determination of eligibility to purchase this service credit. Now SB75 Senator

Member Annuities Paid: Repeal the law that allows a reserve payout of benefits of less than $20 per month. Now SB137 Senator Jason Rapert

Option C Clarification: To allow members who retirement with a benefit option C, which guarantees 120 payments, to change beneficiaries after retirement if the option beneficiary is a spouse and the marriage ends in divorce or other marriage dissolution. Now HB1078 Representative Gary Deffenbaugh

Recycling Tax Credits: To extend the transferability of recycling tax credits within equity owners of certain investment projects in , to encourage more specialized projects and enhance investment returns. Now HB1132 Lead Sponsor: Representative Monte Hodges, Co-Sponsors: Senator David Burnett, Senator

*ATRS Appropriation: ATRS appropriation for the 2015-2016 fiscal year Now SB113 Page 2 of 13 Sponsor: Joint Budget Committee

ATRS closely follows bills that could impact ATRS during the 2015 Legislative Session. ATRS has a 7 bill package. At this time, all 7 bills have been formally introduced and have a listed sponsor and bill number. ATRS appreciates the assistance of all legislators who are sponsoring bills in the ATRS Board's legislative package. The Sponsors include:

Senator Blake Johnson Senator Uvalde Lindsey Senator Eddie Cheatham Senator Keith Ingram Senator David Burnett Representative Lanny Fite Senator Jason Rapert Representative Monte Hodges Senator Bill Sample Representative Gary Deffenbaugh

This summary provides a brief title and explains the potential impact of all 7 bills in the package and any other bills that impact ATRS. (Shell bills may be filed on behalf of ATRS to act as place holders in the event action is needed beyond the current legislative package.) Some bills have an emergency clause that would make the bill effective July 1, 2015. Some bills have an emergency clause that makes the bill become effective immediately. A bill without an emergency clause would become effective 90 days after the session ends.

ATRS PACKAGE BILLS FOR THE 2015 SESSION

Bills Sponsor Description Status SB38 Sen. B. Johnson Compliance with Law allowing Direct Rollover Passed Senate SB48 Sen. Sample Disability Retirement Benefit Passed Senate SB50 Sen. Cheatham Technical Corrections Passed Senate SB75 Sen. Lindsey How Private School Service is Recorded Passed House SB113 JBC ATRS Appropriation for 2015-2016 fiscal year JBC SB137 Sen. Rapert Member Annuities Page as Lifetime Benefit Passed Senate HB1078 Rep. Deffenbaugh Option C Clarification Actuarial Study HB1132 Rep. Hodges Recycling Tax Credit Clarification Committee

BILLS ON BEHALF OF ATRS OUTSIDE OF ATRS PACKAGE

SB134 Sen. D. Johnson Technical Corrections to Title 24 of the AR Code Concerning Filed Public Retirement (no substantive change)

NON-ATRS FORMER SHELL BILL NOW AFFECTS ATRS & OTHERS

HB1215 Rep. House Amend Law Concerning Reporting Requirements Amended

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 3 of 13

SHELL BILLS ON BEHALF OF ATRS

Bills Sponsor Description Status SB171 Sen. B. Sample Concerning the Arkansas Teacher Retirement System Filed SB189 Sen. D. Johnson Amend Statutes Concerning ATRS Filed HB1107 Rep. Gossage Amend Statutes Concerning ATRS Filed HB1200 Rep. Leding Amend Statutes Concerning ATRS Filed

LAST SHELL BILL THAT COULD BE AMENDED TO AFFECT ATRS

Bills Sponsor Description Status HB1182 Rep. Ballinger Amend Law Concerning Retirement and Pensions Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 4 of 13 IMPACT AND ANALYSIS OF ATRS PACKAGE BILLS AFFECTING ATRS, MEMBERS, AND EMPLOYERS

Bill# Sponsor: Senator Blake Johnson SB38 Compliance with Law Allowing Direct Rollover

Emergency Clause: Effective 07/01/2015

Explanation: Non-Spousal Rollover Provisions—This bill makes ATRS law comply with IRS tax code provisions that allow a beneficiary that is not the spouse of a member to be eligible for certain rollovers like those made by ATRS. This law change needs to be made to ensure ATRS remains compliant with newer IRS regulations that expand the group of family members eligible for a rollover of an ATRS residual balance.

ACTION:

12/12/2015 3:36:02 PM - Senate -- DELIVERED TO GOVERNOR. Senate -- Reported correctly enrolled and ordered delivered to the 2/12/2015 3:35:55 PM - Governor. 2/12/2015 3:00:52 PM - Senate -- ORDERED ENROLLED. 2/12/2015 3:00:35 PM - Senate – Returned from the House as passed. 2/12/2015 2:38:52PM - House - Returned to the Senate as Passed. House – Read the third time and passed and ordered transmitted to 2/12/2015 2:38:14 PM - Senate. House—Read the first time, rules suspended, read the second time and 2/3/2015 4:33:57 PM - placed on the CALENDAR 2/3/2015 4:04:54 PM - House—RECEIVED FROM SENATE 2/3/2015 1:55:56 PM - Senate—Ordered immediately transmitted to the House. 2/3/2015 1:55:50 PM - Senate—EMERGENCY CLAUSE ADOPTED 2/3/2015 1:51:07 PM - Senate--Read the third time and passed 2/2/2015 1:38:24 PM Returned to Committee, with the recommendation that it Do Pass Senate -- Read first time, rules suspended, read second time, referred to 1/13/2015 10:12:10 AM - Joint Committee on Public Retirement and Social Security Programs 1/12/2015 1:43:00 PM - Senate -- Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 5 of 13

Bill# Sponsor: Senator Bill Sample SB48 Disability Retirement Benefits

Emergency Clause: Effective 07/01/2015

Explanation: Disability Retirement—This bill is to allow members to retire on ATRS disability as they currently do, but would add requirements for continued eligibility after three years of disability retirement for those still under age 60. Essentially, ATRS disability retirees under age 60 will be required to obtain Social Security Disability status within three (3) years of being approved for ATRS disability unless an extension is granted for good cause. This change is designed to allow a quick disability decision and at the same time provide more meaningful oversight after disability retirement is approved.

ACTION:

House – Read the first time, rules suspended, read the second time and placed on 2/10/2015 4:33:46 PM - the CALENDAR 2/10/2015 2:39:53 PM - House -- RECEIVED FROM THE SENATE 2/10/2015 2:10:10 PM - Senate – Ordered immediately transmitted to House. 2/10/2015 2:10:06 PM - Senate – EMERGENCY CLAUSE ADOPTED 2/10/2015 2:07:39 PM - Senate -- Read the third time and passed. 2/9/2015 1:42:04 PM - Senate – Returned by Committee, with the recommendation that it Do Pass. Senate -- Read first time, rules suspended, read second time, referred to Joint 1/13/2015 10:27:43 AM - Committee on Public Retirement and Social Security Programs 1/13/2015 10:06:00 AM - Senate -- Filed

Bill# Sponsor: Senator Eddie Cheatham SB50 Technical Corrections

Emergency Clause: Effective Immediately Upon Passage

Explanation: Technical Corrections— This bill makes minor changes in the wording of existing laws to clarify language and intent of laws affecting ATRS.

ACTION:

House -- Read the first time, rules suspended, read the second time and placed on 2/10/2015 4:33:54 PM - the CALENDAR. 2/10/2015 2:39:59 PM - House – RECEIVED FROM THE SENATE 2/10/2015 2:11:19 PM - Senate -- Ordered immediately transmitted to the House. 2/10/2015 2:11:16 PM - Senate -- EMERGENCY CLAUSE ADOPTED 2/10/2015 2:10:16 pm - Senate – Read the third time and passed.

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 6 of 13 2/09/2015 1:41:50 PM - Senate – Returned by the Committee, with the recommendation that it Do Pass. Senate -- Re-referred to Joint Committee on Public Retirement and Social Security 1/21/2015 1:41:54 PM - Programs 1/21/2015 1:41:49 PM - Senate -- REPORTED CORRECTLY ENGROSSED Senate -- Amendment # 2 read the first time, rules suspended, read the second time 1/21/2015 1:41:41 PM - and adopted, ordered engrossed. 1/21/2015 1:40:22 PM - Senate -- Withdraw amendment #1. 1/21/2015 1:40:00 PM - Senate -- Withdrawn from Committee for purpose of amendment # 1 Senate -- Read first time, rules suspended, read second time, referred to Joint 1/13/2015 10:28:43 AM - Committee on Public Retirement and Social Security Programs 1/13/2015 10:15:00 AM - Senate -- Filed

Bill# Sponsor: Senator Uvalde Lindsey SB75 How Private School Service is recorded for purpose of retirement benefits.

Emergency Clause: Effective Immediately Upon Passage

Explanation: Private School Service— This bill allows ATRS to make the determination of eligibility to purchase certified teaching service credit, instead of the Department of Education due to responsibility changes at the Department of Education. The Department of Education no longer has staff responsibility to certify private school teachers, so a request was made to shift certification responsibility to ATRS. ATRS already certifies all other types of service and this will bring uniformity to the process.

ACTION: 2/10/2015 2:44:00 PM - Senate – DELIVERED TO GOVERNOR. 2/10/2015 2:43::50 PM - Senate – Reported correctly enrolled and ordered delivered to the Governor. 2/10/2015 2:43:45 PM - Senate -- ORDERED ENROLLED 2/10/2015 2:43:27 PM - Senate – Returned from the House as passed. 2/10/2015 2:21:17 PM - House – Returned to the Senate as Passed. 2/10/2015 2:21:14 PM - House – EMERGENCY CLAUSE ADOPTED. 2/10/2015 2:20:27 PM - House – Read the third time and passed and ordered transmitted to the Senate. House—Read the first time, rules suspended, read the second time and 2/3/2015 4:34:07 PM - placed on the CALENDAR 2/3/2015 4:05:04 PM - House—RECEIVED FROM SENATE 2/3/2015 2:00:33 PM - Senate—Ordered immediately transmitted to the House. 2/3/2015 2:00:30 PM - Senate—EMERGENCY CLAUSE ADOPTED 2/3/2015 1:56:02 PM - Senate--Read the third time and passed Senate -- Read first time, rules suspended, read second time, referred to Joint 1/20/2015 1:53:02 PM - Committee on Public Retirement and Social Security Programs 1/20/2015 12:35:00 PM - Senate -- Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 7 of 13

Bill# Sponsor: Senator Jason Rapert SB137 Member Annuities are paid as a lifetime benefit by repealing lump-sum paymentsof reserve value of small annuities in the Arkansas Teacher Retirement System.

Emergency Clause: Effective 07/01/2015

Explanation: Lump-Sum Payments of Reserve Value of Small Annuities--- This bill repeals the law that allows a reserve payout of benefits of less than $20 per month. Most members and ATRS now prefer to pay the member a lifetime benefit, even on smaller annuity amounts since usually the smaller annuity amounts usually are associated with the member also receiving a lifetime benefit from another retirement system, such as APERS at the same time.

ACTION:

House -- Read the first time, rules suspended, read the second time and placed on 2/10/2015 4:33:58 PM - the CALENDAR. 2/10/2015 2:40:09 PM - House -- RECEIVED FROM THE SENATE 2/10/2015 2:13:19 PM - Senate -- Ordered immediately transmitted to the House. 2/10/2015 2:13:14 PM - Senate -- EMERGENCY CLAUSE ADOPTED 2/10/2015 2:11:24 PM - Senate -- Read the third time and passed. 2/9/2015 1:41:36 PM - Senate – Returned by the Committee, with the recommendation that it Do Pass. Senate -- Read the first time, rules suspended, read the second time and referred to 1/26/2015 2:05:56 PM - Joint Committee on Public Retirement and Social Security Programs 1/26/2015 1:31:00 PM - Senate -- Filed

Bill# Sponsor: Representative Gary Deffenbaugh HB1078 Option C Benefit

Emergency Clause: Effective Immediately Upon Passage

Explanation: Option C Clarification— This bill is to allow members who retire with an Option C

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 8 of 13 benefit election (guaranteed 120 monthly benefit payments even if the member dies) to change beneficiaries after retirement if the option beneficiary is a spouse and the marriage ends in divorce or other marriage dissolution before the 120 months have passed. This brings Option C in line with the other lifetime options available to ATRS members. Under current law, a divorce does not allow a member to remove a new former spouse as the Option C beneficiary.

ACTION: House -- Read the first time, rules suspended, read the second time and referred to 1/15/2015 4:43:02 PM - the Committee on PUBLIC RETIREMENT & SOCIAL SECURITY PROGRAMS-JOINT 1/15/2015 2:06:00 PM - House -- Filed

Bill# Sponsor: Representative Monte Hodges HB1132 Allocation of Recycling Tax Credit

Emergency Clause: Effective Immediately After Passage

Explanation: Tax Credits – This bill is to extend the transferability of Arkansas recycling tax credits to another equity owner if an Arkansas public retirement system is an equity owner of a project eligible for the tax credit. This allows ATRS to share in the tax credit like other investors.

ACTION:

Senate – Read first time, rules suspended, read second time, referred to Senate 2/9/2015 1:54:14 PM - Committee on Revenue and Taxation. 2/5/2015 3:00:55 PM - Senate – Received from House. 2/5/2015 1:57:22 PM - House – EMERGENCY CLAUSE ADOPTED 2/5/2015 1:57:19 PM - House – Read the third time and passed and ordered transmitted to Senate. 2/3/2015 10:38:54 AM House -- Returned by the Committee Do Pass House -- Read the first time, rules suspended, read the second time and referred to 1/22/2015 4:31:21 PM - the Committee on REVENUE & TAXATION- HOUSE 1/22/2015 2:14:00 PM - House -- Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 9 of 13 IMPACT AND ANALYSIS OF BILLS ON BEHALF OF ATRS OUTSIDE OF ATRS PACKAGE

Bill# Sponsor: Senator David Johnson SB134 Technical Correction Requested by Code Revision Commission of the General Assembly

Emergency Clause: Effective 90 Days After Legislative Session Adjourns Sine Die

Explanation: This is a technical corrections bill requested by the Code Revision Commission of the General Assembly to correct minor wording, punctuation, and numbering rules for laws in Title 24 (Arkansas Public Retirement) in the Arkansas code. This is an ongoing function of this Commission to bring consistency to the laws of Arkansas. There are no substantive changes to ATRS in this bill.

ACTION:

2/4/2015 1:39:53 PM - Senate—Re-referred to Senate Committee on Judiciary 2/4/2015 1:39:48 PM - Senate –REPORTED CORRECTELY ENGROSSED Senate—Amendment #1 read the first time, rules suspended, read the second time 2/4/2015 1:39:44 PM - and adopted, ordered engrossed 2/4/2015 1:39:34 PM - Senate – Withdrawn from Committee for purpose of amended #1 Senate -- Read the first time, rules suspended, read the second time and referred to 1/26/2015 2:0:00 PM - Senate Committee on Judiciary 1/26/2015 12:54:00 PM - Senate -- Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 10 of 13 IMPACT AND ANALYSIS OF NON ATRS FORMER SHELL BILL NOW AFFECTS ATRS AND OTHERS

Bill# Sponsor: Representative Douglas House HB1215 Amend Law Concerning Public Employee Retirement Plans to specify Reporting Requirements for all Taxpayer Funded Retirement Systems.

Emergency Clause: N/A

Explanation: This former shell bill is now an active bill that affects ATRS and other retirement systems.

ACTION:

2/6/2015 9:09:51 AM House – REPORTED CORRECTLY ENGROSSED. House – Amendment No. 2 read and adopted and the bill ordered 2/6/2015 8:34:18 AM engrossed. 2/6/2015 8:34:07 AM House – Placed on second reading for the purpose of amendment. House – In accordance with House Rule 39 Read the second time and 2/3/2015 4:03:58 PM referred to the Committee on PUBLIC RETIREMENT & SOCIAL SECURITY PROGRAMS-JOINT 2/3/2015 9:34:56 AM House - - REPORTED CORRECTLY ENGROSSED House --Amendment No. 1 read and adopted and the bill ordered 2/3/2015 8:28:48 AM engrossed. 2/3/2015 8:28:43 AM House --Placed on second reading for the purpose of amendment. House-- In accordance with House Rule 39 Read the first time and referred 2/2/2015 2:25:51 PM to the Committee on HOUSE JOURNAL; ENGROSSED AND ENROLLED BILLS 1/30/201511:30:00AM House Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 11 of 13 IMPACT AND ANALYSIS OF SHELL BILLS ON BEHALF OF ATRS

Bill# Sponsor: Senator Bill Sample SB171 Concerning the Arkansas Teacher Retirement System

Emergency Clause: N/A

Explanation: This is a shell bill filed on behalf of ATRS.

ACTION: Senate—Read first time, rules suspended, read second time, referred to Joint 1/29/2015 7:17:02 AM - committee on Public Retirement and Social Security Programs 1/28/2015 2:30:00 PM - Senate –Filed

Bill# Sponsor: Senator David Johnson SB189 Amend Statutes Concerning ATRS

Emergency Clause: N/A

Explanation: This shell bill will be filed on behalf of ATRS by the Senate Co-Chair of the Public Retirement Committee. Senator Johnson will file shell bills on behalf of each of the retirement systems.

ACTION:

Senate --Read first time, rules suspended, read second time, referred to Joint 2/2/2015 1:43:59 PM - Committee on Public Retirement and Social Security Program 1/30/2015 8:44:00 AM - Senate—Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 12 of 13

Bill# Sponsor: Representative Bill Gossage HB1107 Amend Statutes Concerning ATRS

Emergency Clause: N/A

Explanation: This is a shell bill filed on behalf of ATRS.

ACTION:

House – In accordance with House Rule 39 Read the first time and referred to the 1/20/2015 4:50:21 PM - Committee on HOUSE JOURNAL; ENGROSSED AND ENROLOLED BILLS 1/20/2015 4:13:00 PM - House -- Filed

Bill# Sponsor: Representative HB1200 Amend Statutes Concerning ATRS

Emergency Clause: N/A

Explanation: This is a shell bill filed on behalf of ATRS.

ACTION:

House – In accordance with House Rule 39 Read the first time and referred to the 1/29/2015 4:30:10 PM - Committee on HOUSE JOURNAL; ENGROSSED AND ENROLOLED BILLS 1/29/2015 1:47:00 PM - House -- Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session Page 13 of 13 IMPACT AND ANALYSIS OF OTHER SHELL BILL THAT COULD BE AMENDED TO AFFECT ATRS

Bill# Sponsor: Representative Bob Ballinger HB1182 Amend Law Concerning Retirement and Pensions

Emergency Clause: N/A

Explanation: This is a shell bill that could possibly affect ATRS.

ACTION:

House – In accordance with House Rule 39 Read the first time and referred to the 1/27/2015 4:40:12 PM - Committee on HOUSE JOURNAL; ENGROSSED AND ENROLOLED BILLS 1/27/2015 2:30:00 PM - House -- Filed

Updated Friday, February 13, 2015 ATRS 2015 Legislative Session